As announced earlier today by the Prime Minister, the Government will introduce a temporary levy in order to partially offset the costs of Australias defence costs in East Timor. The levy will apply to individual taxpayers at a rate of 0.5 per cent on total taxable incomes from $50,001 to $100,000 per annum, and 1 per cent on total taxable incomes in excess of $100,000 per annum.
The levy will apply for a 12 month period only commencing from 1 July 2000.
The 0.5 per cent levy will shade in on incomes above $50,000 in the same way as the Medicare levy. This will mean that the 0.5 per cent Defence-East Timor levy will shade in over the income range $50,001 to $51,282. The 1 per cent levy will also shade from $100,001 to $102,564.
The levy will be collected through tax instalments under the pay as you go (PAYG) withholding and instalment system which commences from 1 July 2000. The levy is estimated to raise around $900 million in 2000-01.
As the levy will only apply to higher income earners, the value of the personal income tax cuts to be introduced on 1 July 2000 under the new tax system will be fully preserved for low and middle income earners.
23 November 1999
| Income | Defence-East Timor Levy (Weekly) |
ANTS Income Tax Cut (Weekly) |
Net Tax Cut in 2000-01 (Weekly) |
| $50,000 | $0.00 | $52.21 | $52.21 |
| $60,000 | $5.75 | $61.80 | $56.04 |
| $70,000 | $6.71 | $61.80 | $55.08 |
| $80,000 | $7.67 | $61.80 | $54.12 |
| $90,000 | $8.63 | $61.80 | $53.16 |
| $100,000 | $9.59 | $61.80 | $52.21 |
| $125,000 | $23.97 | $61.80 | $37.82 |
| $150,000 | $28.77 | $61.80 | $33.03 |